CONSTITUTIONAL AMENDMENT BALLOT MEASURE WILL RAISE COST OF LIVING AND FUNDS MAY NOT GO TO PUBLIC EDUCATION

News Release from Affordable Hawai‘i Coalition October 4, 2018

HONOLULU – A proposed constitutional amendment that will appear on the upcoming General Election ballot will ultimately hurt local families, according to the Affordable Hawai‘i Coalition and other concerned residents, businesses, community organizations and government officials who oppose the measure.

Coalition members, along with Hawaii County Mayor Harry Kim and Honolulu Mayor Kirk Caldwell, gathered today to highlight the negative impact the constitutional amendment will have on Hawaii’s working families, including increased real property taxes for local property owners, higher rents for residents and businesses, and a higher cost of living that will make it even more difficult to afford to live in Hawaii, without any guarantee that the money raised will benefit public education.

Those opposed to the constitutional amendment attending the news conference today stood outside a modest, family-owned walk-up apartment on Date Street, valued at approximately $1.5 million, to draw attention to the type of investment properties that would be impacted by the new tax. The apartment provides affordable rentals for eight tenants.

In addition to hurting local property owners and renters, the proposed constitutional amendment also will increase real property taxes for farmers who give Hawaii residents locally sourced food, and small businesses struggling to get by in a state ranked as one of the worst in the nation to do business.

“The proposed constitutional amendment to establish a new real property tax to fund public education will raise the cost of living for every person, every family living in the state of Hawaii, including teachers,” said Stan Lau, chair of the Affordable Hawaii Coalition.

“The Chamber represents more than 2,000 member companies and their 200,000 employees,” said Sherry Menor-McNamara, member of the Affordable Hawaii Coalition and president and CEO of Chamber of Commerce Hawaii. “Ninety-eight percent of our members are small businesses, and we believe this ballot initiative will raise the cost of living for businesses and their employees.”

The question voters will see on the General Election ballot reads, “Shall the legislature be authorized to establish, as provided by law, a surcharge on investment real property to be used to support public education?”

The vaguely worded ballot question has created confusion and misinformation about who would pay the tax, what types of properties and at what value they would be taxed, how the money will be spent and whether the funds will reach public school students and teachers.

“When you read the final version of SB2922, the bill that put this measure on the ballot, it gives the legislature a blank check,” said Lau. “There is no definition of investment real property, which means just about any property can be taxed, and on top of that, there is absolutely no guarantee that money from this new tax will go to classrooms or help pay for teachers’ raises.”

Supporters of the measure claim that it targets only second residential properties valued at over $1 million and owned by out-of-state investors. This is false. The fact is the legislature deliberately removed specific language from the ballot question that would have limited the tax to “residential property valued at one million dollars or greater.” As a result, if the measure is approved, the tax would apply to all properties – residential, commercial and agricultural – regardless of their value and regardless of who owns them.

The legislature also removed specific language that would have mandated how the funds would be spent on public education. An entire section on how the tax would be used was deleted, including “Proceeds from the surcharge may be used for recruitment and retention of teachers, public preschools, reduction in class sizes, special education programming, career and technical education, art, music, Hawaiian studies, Hawaiian language instruction, after-school programs.”

In addition, the words “fund” and “for Hawaii’s children” were removed from the actual ballot question, so instead of reading, “to fund public education for Hawaii’s children,” the question simply reads “to support public education.” This vagueness leaves the door open to have the funds used for other public education purposes including, “a state university, public libraries and other such educational institutions as may be deemed desirable, including physical facilities.”

“My children attend public school and my wife is a former public school teacher. We support our schools, but this is not the solution to pay for education. Our keiki deserve better. Our local families deserve better,” said Lau.

With no guarantee of additional money for public education under the bill, the legislature could use the new funds to replace a portion of the nearly $2 billion in General Funds that currently goes to education and divert it to other priorities.

Mayors Kim and Caldwell emphasized the impact the constitutional amendment would have on the counties, including undermining the counties’ exclusive authority to tax real property, making it even more difficult for county officials to balance their budget and hurting the counties’ bond ratings, which increase the cost to borrow funds for critical infrastructure improvements.

“It is so very important that the people of this state understand all aspects of this disastrous proposed constitutional amendment,” said Mayor Kim. “It is so disappointing that such a proposal is submitted without one single attempt to communicate with any of the county governments of Kauai, Oahu, Maui and Hawaii Island to gain input on the impact this proposal would have on the County government’s primary source of income that funds the police, fire, parks, citizens’ programs and other departments. I ask the citizens to take the time to educate themselves on this disastrous proposal for the people and the county governments of Hawaii.”

Numerous organizations oppose the constitutional amendment, including Hawaii State AFL-CIO, University of Hawaii Professional Assembly, Laborers-Employers Cooperation & Education Trust, Hawaii Farm Bureau, Building Industry Association of Hawaii, Hawaii Automobile Dealers Association, Chamber of Commerce Hawaii, Hawaii Island Chamber of Commerce, Japanese Chamber of Commerce and Industry of Hawaii, Kauai Chamber of Commerce, Kona-Kohala Chamber of Commerce, Maui Chamber of Commerce, Molokai Chamber of Commerce and others.

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About the Affordable Hawaii Coalition

The Affordable Hawaii Coalition represents a diverse group of people from across the state who are working to educate fellow Island residents about the negative effects of the proposed constitutional amendment and why voters should vote NO on the ballot question. The coalition includes small business owners, renters, education advocates, union members and other local citizens who are deeply concerned about increasing the cost of living for Hawaii’s residents. For more information, visit www.affordablehawaii.org.